Obama seems determined to roll back the few remaining elements of the New Deal. As we’ve recounted, he’s keen to cut Medicare and Social Security; he said as much in a dinner with leading conservative luminaries shortly after his inauguration. And his JOBS Act, which guts securities law protections on smaller stock offerings, is touted as a way to increase employment by helping to fund smaller businesses. In reality, the only jobs it is likely to create will be due to the resulting explosion in stock scamsters and bucket shop operators.

Amar Bhide, who has written the classic, The Origin and Evolution of New Businesses, has decisively debunked the idea underlying the Obama Bucket Shop act, which is that public stock offering are an important source of funding for new businesses. The problem is, as Bhide explained, is that academics focus on the easy to study but relatively inconsequential venture capital funded companies which look to IPOs as an exit. Bhide found that only 1% of new and young businesses were funded by venture capital. Similarly, his multi-year study of Inc 500 companies found that a comparatively small portion had VC backing, and even then, many got VCs in at a late stage, not because they needed the money but having the “right” VCs would lead to a much bigger premium when they went public.

Bhide found that most new businesses are based on an insight about an business opportunity that the founders discovered as employees (ie, they saw a market niche that incumbents were ignoring). These ventures were funded by savings, friends and family, and credit cards.

Similarly, the idea of venture capital or stock promoter funding as some sort of boon for entrepreneurs is wildly overstated. I’ve gotten involved in some early stage tech deals. One of the people I worked with often, an attorney buddy who was tech and deal savvy, viewed VC as the absolute least preferred source of funding. She was very creative about getting vendor finance or getting advances on licenses. Selling equity in early stage companies is not only costly, but you are one step away from losing your control over your destiny. I’ve seen cases where the founder was ousted (and the business tanked afterwards) not because he wasn’t performing, but other members of the team conspired against him (and persuaded the dunbnick VCs that they were better operators). Even in healthier relationships, it’s altogether too common for the VCs to confuse aggressive babysitting with effective and productive oversight.

And this isn’t just my view. The value added of venture capital is questionable. It produces stock-market type returns with more volatility. A colleague who founded a successful venture capital firm left when it went to do a second round of funding (the junior partners stayed on). He gave a long form, compelling analysis as to why: when you actually went through the numbers, the returns to the entire asset class depended on the returns of a very few firms, and even at them, of a very very few deals (And the indirect proof was his firm was raising money having realized profits on only about 1/3 of its portfolio; you’d have to accept their view of how the rest would turn out to think it was worth joining their new fund).

And funding via cheap stock operators is even worse. I had a client wind up getting funded by a Florida pink sheets player (he had an existing business that was being spun out of a bank; they actively undermined the effort which is why he wound up where he wound up). They backed his business into a public shell they had sitting around. It was simply fodder for them to run the price up and down. They eventually merged that company into another one at not-worth-all-the-trouble price for the management team, which has restricted stock and weren’t able to exit during the phase when the touts were having fun playing the stock.

Moreover, the idea that small businesses aren’t being formed or hiring has much to do with access to equity funding is bunk. Surveys of small businesses continue to show that they are cautious on the staffing front (there has been a small uptick in hiring plans from a low base). The big reason is uncertainty, meaning uncertainty over demand for their products and services. New businesses have even tougher sledding than existing ones. Better access to costly equity (even if that resulted) is not what is constraining new business formation or hiring by small businesses. It’s the crappy state of the economy.

Simon Johnson and Bill Black have attacked the other obvious flaw of this bill: it’s terrible for the US capital markets. In the 1990s, the US equity market was the deepest and most liquid not just because the US was a big economy, but also because investors had confidence that tough rules on disclosure and prohibitions against insider trading and abuses like front-runnning protected them.

The premise is that the economy and startups are being held back by regulation, a favorite theme of House Republicans for the past 3 ½ years – ignoring completely the banking crisis that caused the recession. Which regulations are supposedly to blame?

I do not think that the bills being considered will result in a flood of companies going public. I do not think that these bills will result in noticeably higher economic growth and job creation.

In fact, he also argued that the measures under consideration “might be to reduce capital formation.”

Professor John Coates hit the nail on the head:

While the various proposals being considered have been characterized as promoting jobs and economic growth by reducing regulatory burdens and costs, it is better to understand them as changing, in similar ways, the balance that existing securities laws and regulations have struck between the transaction costs of raising capital, on the one hand, and the combined costs of fraud risk and asymmetric and unverifiable information, on the other hand. (See p.3 of this December 2011 testimony.)

In other words, you will be ripped off more. Knowing this, any smart investor will want to be better compensated for investing in a particular firm – this raises, not lowers, the cost of capital. The effect on job creation is likely to be negative, not positive.

Sensible securities laws protect everyone – including entrepreneurs who can raise capital more cheaply. The only people who lose out are those who prefer to run scams of various kinds.

Bill Black, in a letter opposing the bill, is more curt:

The “Jumpstart Our Business Startups” Act, the comically forced effort to create a catchy acronym, is the most cynical bill to emerge from a cynical Congress and Administration. It is an exemplar of why Congressional approval ratings are well below those of used car dealers. The JOBS Act is something only a financial scavenger could love. It will create a fraud-friendly and fraud-enhancing environment. It will add to the unprecedented level of financial fraud by our most elite CEOS that has devastated the U.S. and European economies and cost over 20 million people their jobs. Financial fraud is a prime jobs killer.

Deregulation was the root of the financial crisis just past, but no on in the administration seems to have gotten the memo. This bill is astonishingly wrong-headed., which means it is par for the course for Team Obama.

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73 comments

Selling equity in early stage companies is not only costly, but you are one step away from losing your control over your destiny. Yves Smith

Not if you only sell 49% of the common stock!

As for savings and credit as funding, they are a trade-off. Credit creation robs savers of honest interest rates. And btw, a universal (including non-debtors) bailout from ALL credit debt would provide massive amounts of savings for investment and consumption purposes.

It doesn’t often work that way, I know of only one guy who got outside funding (angels, not VCs) who retained control over his company for 15 years. He had one big stuff up, a botched transition to a new platform, and he was out.

The way it works is:

1. You have to present overly rosy projections to get funded because everyone else does

2. The VCs fund you to only some particular results date. When you miss it, the next funding is on punitive, meaning more dilutive, terms. Or they have a provision where their stake in the company increases if you fail to deliver.

The pain of the pound of flesh. Back when dot.com was still minting money, the firms that took companies public were carnivorous: they demanded and got huge equity stakes or they didn’t take you to market. Extortion by any other name. Be interesting to ask now if everyone who walked that plank thinks it was worth it.

Yeah, but when you win the House and sixty votes in the Senate a US President is expected to both shit and get off the pot. Also, the nuclear option to eliminate the filibuster doesn’t require 60 voter. Further, FDR, on the way to creating 15 million jobs, created the WPA through executive order. So your point was, exactly?

Oh please! Stop apologizing for this man, who has led the charge on rolling back the social protections of the New Deal and Great Society.

Bill Clinton had a hostile congress, and managed to make Gingrich look like a total monkey (admittedly not that hard) over threats to shut down the government. Clinton and Dole were able to communicate, although I admit Dole (with his many faults) was more reasonable than any contemporary republican.

Having worked 20 years as a securities lawyer I can tell you the problem is SEC rules which make it all but impossible for small companies to raise money without involving underwriters every one of which is a boiler room, whether you are talking about self inflated white shoe firms or penny stock operators. The last guy who funded a company selling stock himself was Ross Perot in 1960 or ’61. He began pedding shares at the Texas State Fair and his company EDS was worth a billion dollars by 1970 and Perot owned just about all of it even after a 1967 public offering.

Beginning in 1970, the rules and the world of venture capital changed dramatically. It is very difficult, today, for an entrepreneur to retain control of his company when he seeks funding from a venture capitalist.

tag alongs, drag-alongs, performance triggers, convertibles, and if all else fails fiducary-duty lawsuits (matters not if spurious, who can afford to go to court?)
there are soooo many ways to lose control of one’s company if one gets involved with external funding…

A universal bailout, including non-debtors, till ALL debt to the counterfeiting cartel (the banks) was paid off would vastly increase the amount of cash available for investing and would free up the debtors to consume again.

Deregulation was the root of the financial crisis just past, but no on in the administration seems to have gotten the memo. This bill is astonishingly wrong-headed., which means it is par for the course for Team Obama.

Does anyone remember who the Regulations Czar is? Yeah, Cass Sunstein!! Despite being a boogey man of Glenn Beck, Sunstein is no liberal. In fact, he’s probably a CATO-ish Libertarian. After all, look at the time, and love, he gives(and have given) the University of Chicago.

I wonder what the bottom will look like when everyone is through racing each other to get there.
Maybe something like what Dante’s Virgil describes:
“Look! Here is Dis, and this the place where you
will have to arm yourself with fortitude.”

with this Jobs bill in place the small entrepreneur is in position to retain control of his company compared to VC funding and gain the capital more often than today

the losses from fraud is small risk compared to potential ideas not funded – this puts SEC in position to focus on the big companies scams and ignore the small fries where they have been getting publicity for enforcement without big effect on the market –

they ignore the bank fraud – for politican gains, future jobs and campaign cash -this will put them in position of no choices other than follow enforcement of the big companies

take the risk, live with the losses and see what happens – it can always be reversed

You seem to miss the point. Selling equity is costly. Any real entrepreneur finds other ways to get funded. Apple, Microsoft, Oracle, none of them had VC funding. Jobs got his vendors to supply parts against a order for finished machines. And this bill will raise, not lower the cost of funding small companies because plenty of investors are guaranteed to get burned pronto and give the whole premise a bad name.

I think you miss the point. Real entrepreneurs are not those annoited after the fact by business school whiz kids from McKinsey and Goldman and VC vultures. Real entrepreneurs often have nothing but an idea, some real experience and a passion. They don’t necessarily create billion dollar empires but they might create businesses employing one or two hundred people that make a product in the US that doesn’t fall apart before you get it out of the store.

You have still missed the point. A real entrepreneur avoids selling equity at all cost, and prefers to give it to key stakeholders (typically employees but it can be others). This “oh people should take my stock and leave me alone” was a fantasy encouraged by the excesses of the dot com era.

And yes, I have worked with people with real ideas for real businesses. And passion is oversold as a concept. That comes straight our of the business press that you seem to deride. Tenacity or obsessiveness are much more useful.

On the one hand you are critical of Wall Street, but on the other hand you support the entire Wall Street superstructure which is based upon regulatory capture and regulatory jujitsu. The SEC has been a Potemkin village since FDR appointed stock pool operator Joe Kennedy and tax evader James Landis to head it. The idea that “underwriters” sanitize the offering process by performing magical due dilligence was never anything but a fantasy and even the fantasy should have been exploded by the dot com scandals. If you ever watched SEC bureaucrats shuffling over files while capital starved issuers could only watch and gnash their teeth you would understand the whole situation better.

The best defense against fraud is common sense. The regulatory mentality infantalizes investors to justify a bureaucratic fandango which benefits only those who can afford to dance at the ball. Every ten or fifteen years the SEC prosecutes some inside trader who is caught at the airport with a shopping bag full of money. Meanwhile, thanks to the draconian rules and procedures, nobody can start a business unless he is personally rich. The whole thing is stupid and pathetic and likely to continue until people wise up, so you know how long that will take. Making heros of clowns like Guiliani and Spitzer who cannot wait to betray the constituencies that annoint them. Now we have another one in New York although I cannot remember his name.

Obama is only doing what he was hired to do. At this point, why look for reasons that make sense for the majority of Americans? He’s not serving us and he wasn’t hired to do so, and the veneer of pretense is so thin we might as well drop it all together and change his title from POTUS to something like Senior Managing Director, White House Division.

I’m going to have to disagree on this point, Yves. The model most people in the entrepreneurial community see for this act is allowing something like Kickstarter to fund initial projects – the problem with Kickstarter is that the funds must explicitly be donations; existing law forbids small investors entirely.

I don’t think funding your new business on a credit card is a good idea, and aside from asking friends and family and just saving up, your *only* other current recourse is selling your soul to VC. Good venture capitalists also hook you up with a lot of connections and advice – but coming from my own perspective, I’d rather be independent, and I’m not alone.

Allowing quasi-Kickstarter micro-investors fills a gap in the market, and I’m pretty happy Obama is doing something that will inadvertently benefit me for a change.

Yeah, because you progressive democrats did such a great job of protecting the little guys when Bush was in charge.

I love this site, but i’m so sick of reading idiotic crap like this comment. How did that whole “lets punish Obama by not voting” thing work out in 2010?

Oh, really f*cking badly. You ended up with the Tea party practically in charge, a wild bunch of hard right ideologues who don’t want to compromise over any new Deal programmes, but destroy them altogether.

Here in the UK we’ve ended up with the most right wing government in Europe thats on the brink of privatising our beloved National Health Service. How are they getting away with it? Because 10% of the population vote decided they were just as smart, cynical and intellectually superior as Mr Prentiss, and voted liberal democrat instead of Labour.

Now they bitterly regret it, and have another 4 years or so to repent of their political stupidity. Learn from the UK’s lesson- Obama may not be your dream president, but his opponents are far, far worse.

Obama did nothing when he was in charge. The Tea Party take over in 2010 was simply a convenient cover for his collusion. Obama has damaged the Democratic Party and democracy itself quite beyond anything that a “far worse” Republican could ever do now… Obama’s already done it.

An equity is a terrible promise. All you have is a vote which will be diluted and is pretty meaningless, and maybe you’ll get some dividends someday. It makes sense only if you have meaningful control which you don’t in anonymous, arm’s length investing. Good disclosure and tough regulation of trading is your only protection.

90% of new businesses fail. There are good reasons for investors to stay away from them. As the article indicated (guess you missed that!) the bill is likely to INCREASE the cost of capital for new businesses, not lower it. But you’d rather try your easy money Kickstarter fantasy and screw it up for everyone, particularly investors. Well, i’d like a pony but that doesn’t meant the I’d Like a Pony Bill is a great idea for the country. You really don’t care if people get ripped off. I wouldn’t invest in someone with your attitude.

I was a finance lawyer for a very long time, and the idea that good ideas can’t get funding is completely without factual basis. Sure, you will find the *one guy* who had a great idea and didn’t get funding, just like you will the *one novel* that was passed over by 20 publishing houses and then sold a million copies. These exceptions are, let me tell you, meaningless drops in the ocean. I’m sorry, but I’ve read your business prospectus, and I’ve perused your fiction, and they are not Google or Shakespeare. They aren’t even pets.com or Danielle Steel. They are, I’m sorry, utter and unusable crap, no matter what your mother tells you.

There is literally a trillion dollars looking for a good investment home. If there were great ideas out there, great ideas that would lead to fantastic employment opportunities, that money would eventually find these great ideas.

I mean, look at the post. Even the professionals, the VC people, go out there and identify what they think are the *best* prospects of all, and even most of those prospects fail.

Fraud is the enemy, people. There *are* dishonest people who *will* ruin it for everyone, unless you are vigilant about attaching consequences to their actions.

All you have is a vote which will be diluted and is pretty meaningless, Yves Smith

If the government enforced/backed counterfeiting cartel, the banking system, was abolished then it is likely that common stock itself would be used as private money. Then stock dilution would be a very serious matter since it would literally affect the company’s ability to buy new assets, including labor, with the diluted stock.

and maybe you’ll get some dividends someday. Yves Smith

Likewise, paying dividends (presumably in government money) would not make sense since the common stock itself would be money. Paying dividends would reduce the value of the common stock money since it would reduce the assets backing it.

It all goes back to the usury for counterfeit money cartel, a blight on humanity. Why do we tolerate it?

It makes sense only if you have meaningful control which you don’t in anonymous, arm’s length investing. Good disclosure and tough regulation of trading is your only protection. Yves Smith

If companies were forced (by lack of a counterfeiting cartel to borrow from) to use their own common stock as money then who* the heck would accept that common stock money unless the company bent over backward to be open and accountable?

*Yes, desperate people would but needed reforms would include a universal bailout till all private debt was paid off thus greatly reducing desperation.

I don’t care if people get ripped off? Jeez, Yves, I’m a sole proprietor and a Quaker who’s a firm believer in bootstrapping because I personally think the hands-off investment you advocate here is a great way for rich people to soak startups.

I’m fully aware that 90% of businesses fail – and yet you think they should take their families with them instead of small, informed groups of technical people like me, *or* they should sell their souls to Big Capital, and that situation is just fine with you.

I don’t see why it’s illegal for to kick in a thousand dollars to a small business friend I know unless I’m a millionaire – and yet you’re so sure I need to be protected that you say I want to rip people off with my fantasy world.

All in all, you people commenting here, I’m quite disappointed with the ad hominem approach. At least Yves has an argument, even though I think it’s wrong.

The problem is that even the current assumption that millionaires inherently are savvy enough to discern scam from genuine opportunity is faulty. Simply expanding the universe of potential victims without adding safeguards won’t work.

Crowdfunding can be viable without necessarily putting tons of vulnerable people in the shark tank. As it stands, I kind of like the fact that profit-seeking businesses have to prove a case to tight-fisted investors, while individual projects can seek donations from the public. Crowdfunding as a business plan seems prone to abuse.

On the never-ending mid-east war in Afghanistan and the possible new one in Iran, and the economy, President Obama is a bitter disappointment. Progressives, like myself, thought Obama would be FDR-lite with JFK on the side. Instead, we got Hoover-lite with Bush on the side.

I hope that Obama is a one-term president. Democrats protect the people much better when not occupying the White House.

“I just got a call about a half hour ago from Speaker Boehner,” the president began. “Essentially, what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense. We then offered an additional $650 billion in cuts to entitlement programs — Medicare, Medicaid, Social Security.”

All good points Yves, but I think it’s important to consider the whole picture. If you’re a company with $500 million or so in revenue and public, it’s hard enough to compete against incumbents 10x your size, and the reporting requirements from SarBox are much more burdensome for a small firm (which doesn’t have an army of lawyers and accountants) than for a big company. Giving these smaller companies an easier path to growth is good for everyone, while leaving those roadblocks up just encourages the small guys to move to a more favorable locale(if/when they can) or not list at all. In the former case they may take jobs with them, and in the latter case, you stifle the allocation of capital by taking away investment opportunities from individuals. Comparing the number large versus small companies, the scam/rogue operator problems make up a much larger percentage of the opportunity set for the big guys rather than the little guys.

The exemptions for SarBox being discussed are for companies with a $1 billion or less in revenue, so I picked an arbitrary number less than that. And yes, relative to large companies like Wal-Mart, Target, McDonalds, ($422 bn, $67 bn, and $24 bn in revenue respectively), $500 million in sales is really not that big. Since SarBox doesn’t apply to privately held companies, it doesn’t really make sense to address generic the family business that has $5 million in sales.

I wasn’t trolling, I was making a point that just might not be in total agreement with your view. Thank you for missing it entirely and responding to nothing of merit in my comment. Also note that I didn’t say I disagree with any of Yves’ points, just that there are other factors to consider. Perhaps you should read MY post more carefully. My comment was in fact on topic and I did pay attention to Yves’ post, despite your accusations otherwise.

You guys are astonishingly ignorant. Have you ever dealt with bucket shop operators or the pink sheet guys? Or read about what the stock market was like before the 1933 and 1934 Acts? There actually is a not terrible level of compliance with the rules as far as disclosure is concerned. You are batshit to want to promote markets without that. This is a license to create lots of mini Madoffs and other versions of con artists.

Actually it’s hardly a Freudian slip. My point is that I believe that much of what purports to be regulation does very little good and often does a lot of harm.

It doesn’t matter how comprehensive your regulations are if the “larger well-funded” players can buy off the system or if the little guy is eliminated by regulations influenced by those same larger players. It doesn’t matter if your regulators are not smart enough to understand what they are regulating or if they just don’t give a damn.

One example (separate from finance) involves small toy-makers. When the Chinese were caught selling children’s toys with poisonous paint, some regulatory group set up draconian rules requiring every type of toy to have a detailed inspection by an outside lab. The cost of this inspection as I remember was about $1500. If your toy came in several colors, each color had to have a separate inspection. (Again, from memory, even toys that were all wood, (with no paint of any kind) still had to go thru this inspection process.

Many of these toys had been produced by small craftsmen, as a hobby venture that made a few bucks – if they were lucky. The total profit from one of these product lines was often less than $1500. None of these small craftsmen had been selling toys with poisonous paint, but today it’s not a problem because they are no longer in business.

Again, (from my inexact memory), some new regulations were passed in recent years that required a dozen or so hours of “training” for mortgage loan officers and processors – at their own expense. This training keeps loan officers and processors from doing things that they never did when we had an honest system. (This was because the underwriters would not let them do those things). They are now being trained not to do things that they can’t do anyway.

Well thought-out intelligent regulation would be a good thing. If we can’t have that, I would vote for the wide open model.

One major difference between 1933 and today is that information is inexpensive and easily available. If the public demands transparency, companies that want investment money will have to provide that information.

[Burp] Glad to see that the gov finally recognized what’s wrong with this country. Too much investor protection (from the SEC?!?). Less transparency is needed. Probably why we can’t buy a hundred dot.coms anymore while we’re searching for the next MSFT.

I knew a few entrapenurs too. All of them said they would rather stick pins in their eyes than go the VC route. One guy sold himself to a large competitor. Another did go the VC route (found a dumb one) but he was the 87th company with Amazon’s biz plan and it failed before the VC could do the IPO pump and dump on the general public. (and also keep 50% of the proceeds)

But Chinese fraud companies have had great success with the reverse corporate shell listings on an American exchange. So maybe the SEC is less vigilant than we think.[Burp?!?]

But I hear dog walking/babysitting startups are a hot new thing, so if we can buy an IPO in one of those
maybe Lucy won’t pull the football again. [muffled noise]

By passing this nonsense, Congress is basically revealing a sordid truth: “We [Congress] don’t really understand how small business works, we mostly get our information from people who make money by moving money around, most of whom are scam artists — and yeah, they’ve just scammed us *again*, but it suits our vanity and they give us campaign donations…”

BTW Reid apparently has pulled the bill, for now, after 3 Dmocratic amendments that were supposed to make it more palatable failed at cloture. But in a kleptocracy really bad ideas, that is good looting opportunities, almost never die so this could well come back at some point.

I stopped reading after the third paragraph.
(ok I read the whole thing, but it stopped being relevant after para 3)

The big lie about small businesses is that Federal programs have nothing to do with the success of true small businesses covered in the preamble. Shame on any of us who fall for this rhetoric.

It’s like watching the world through a Today show lens. The outliers that benefit from some conventionally popular ideal, cooking shows, hoarders, weight losers) are the only ‘small businesses’ that are attractive to the VCs and politically sponsored small business investors.

If anyone doubted that american capitalism is dying (perhaps dead) they would only need to read this post for a descrption. i havent seen so much effort put into NOTHING since i was a heroin addict/crack head/obsessive hand washer.

The JOBS bill should be killed. Allowing for less diclosure and transparency in the raising of capital is a bad idea and ignores all the other great experiments in reducing disclosure and accountability. The result can only be more frauds where nobody commits a crime because we’ve removed the laws.

Obama and Congress would be misguided if they think less disclosure will attract more equity. It will attract less. The rules that require disclosure and audits are not done for the benefit of companies, but for the benefit of investors so they can know that their monies are honestly invested and understand how their funds are being stewarded. Take away this disclosure and investors will eventually boycot the market. Blind pool investing is a terrible idea.

Obama seems determined to roll back the few remaining elements of the New Deal. Yves Smith

The New Deal was not radical enough. Instead of propping up the banking system (eg. government deposit insurance), it should have bailed out the entire population and started over with ethical money creation.

But that’s water under the bridge. We know better now. The goal should not be to move backwards to the New Deal but to move forward to an Honest Deal.

The problem is the next Presidential race will be between President Goldman Sachs and Candidate Bain Capital. So expecting anything good to come out of the government in a financial sense seems Quixotic at best.

Re: Yves’ comment about it being hard to maintain control of a company when venture capital is accessed. I have a nephew with considerable experience with start-ups. He once told me that the CEO has about a 50% chance of surviving the first round of investment, and again about 50% after that of surviving a second round. He says the investors will decide who the key people are (at least in their view) and wiil make deals to keep them on. The CEO is rarely seen as one of those people.

There is the truism that equity is a better investment than debt, so the converse is generally true for the business owner – debt is a better deal than giving away equity – if your successful.

I’ve seen a lot of small businesses, some that make the biz section, others that don’t. Home equity WAS a huge part of the real capital structure of just about every small business I saw. Personal guarantees are a part of EVERY one.

The “benign” era of low doc/no doc home lending, say ’98 to ’02, had a significant “alternative commercial lending” aspect to it. Whether a business owner has home equity and has access to it is still the best indicator I know of whether they’re going to make it.

I agree with Yves, issuing stock is not what owners want to be doing, and it is very expensive.